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Indoco Remedies Ltd
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Ladies and gentlemen, good day, and welcome to Indoco Remedies Limited Q2 FY '25 Earnings Conference Call hosted by Dolat Capital. [Operator Instructions] Please note that this conference is being recorded. I now hand the conference over to Mr. Rashmi Shetty from dollar Capital. Thank you, and over to you, ma'am.
Thank you, Sisa. Good afternoon, everyone. I'm Rashmi Shetty. On behalf of Dolat capital, welcome you all on the Q2 FY '25 earnings [indiscernible] Indoco Remedies companies. I would like to thank the management of Indoco Remedy for giving me this opportunity to host the call. Today from the management team we have a guest Miss Aditi Panandikar Managing directer MD, Mr. Sundeep Bambolkar, joined MD and Pramod Ghorpade CFO. I'll now hand over the call to the management for the opening remark, over to you sir.
Thank you, Rashmi. Good afternoon, everyone. Thank you all for joining this call today. Let me draw your attention to the fact that on this call, our discussion will include certain forward-looking statements Which are projections or estimates about our future events.
These estimates reference to management's current expectations of the future performance of the company. Please note that these estimates evolve involve certain risks and uncertainties that could cause our actual results to differ materially from what is expressed or implied.
Indoco does not undertake any obligation to publicly update any forward-looking statements, whether as a result of new transformation, future events or otherwise. Thank you. I'll request Aditi madam for her opening comments.
Yes. Good afternoon, everybody, and once again, thank you for joining us. It gives me immense [indiscernible] Asia to let you all know that this August, the organization celebrated 77 years of excellence in providing quality medicines and building [indiscernible] community.
This has been a tough quarter for us, but let me share some of the general business highlights with you. As regards to India business, we have seen good growth in most of our key brand and majority of par therapy this quarter.
Cyclopam the #1 product of the company, the antispasmodic analgesics has recently crossed a subscriber base of 1 lakh subscriber description describers in the quarter in this quarter.
And incidentally, the brand is also growing at close to 20%. During the quarter, in the India business, we also launched new products, mainly prior exiting mouth wash sensodent anti pro, both in the Dental segment, dental ethical segment and CTM250 and 500 MG, which is a clarithromycin antibiotics in the ethical segment, in our acute division.
Steam Jobs once said about his life, right there were good times and there were hard times, but they were never bad times for whatever is worth, the international business at Indoco currently is going through difficult times, but very interesting changes happening inside the organization to prepare the company for the future wherein, especially in the foliar space, efficiency in manufacturing and agility of product past Are going to be the need of the R and the company will prepare you for that.
As you might be aware, we have close to 15 ANDAs in the collidoral space, of which at least two are great opportunities with consitive approvals for the future. Also, in the current market, which is being supplied to the U.S., we have some excellent products such as aloprinol, which are vertically integrated.
The company has made tremendous strategic plan on a master manufacturing operation to harmonize products at various locations, to increase that size, to bring down cost of testing as well as bring down other costs related to manufacturing. As part of this exercise, some of our plans are currently not in a position to supply all the orders that they have in hand.
This -- added to this, we also have some challenges still in Plant 2, which is our Sarai unit, where there is remediation going on across various clients. for manufacture of panic and injectables. This remediation is in line with U.S. FDA expectations.
These 2 factors have largely resulted in our inability to supply a product to our -- the best of our abilities. And we therefore see the international business, particularly back to U.S. and Europe having been impacted. Having said that, I would also like to share that in this period, Indoco received the final ANDA approval from U.S. FDA for lofexidine tablet 0.1, 0.18 mg with competitive generic therapy designation with 180 days exclusivity.
In the call so we see approvals from WHO Ginava for albendazole 400-table tablets. Our contracts in such organization and scar CRO at Hyderabad has expanded its offerings with the new pharmaco vigilance services there sensodyne [indiscernible] of India 2024 awards in the sensitivity oral health care market.
And we had a very successful launch recently of the new [indiscernible] management system is [indiscernible] also I will now hand over to Mr, Sundeep to share the financial hit.
Yes. Thank you, Ariel. Good afternoon, everyone. Hope you all are doing fine to. Let me for begin with the business highlights. Net revenue of the company for the second quarter, '24, '25 showed muted growth at INR 3,946 million compared to $3,942 million when compared to the immediate preceding quarter. EBIT as sales were quarter 13.4% at INR 529 million compared to 15.6% at INR million, for the same quarter last year.
Tax to net sales for the quarter is at INR 128 million compared to INR 331 million. Earnings per share for the quarter is INR 1.39 compared to 3.5 -- the account numbers are on a stand-alone basis.
We have declared results big consolidation, which includes results of society. Domestic formulation business -- revenues from domestic business for the quarter grew by 2.9% at INR 2,346 million as compared to INR 2,281 million for the same quarter last year. Major therapeutic segments, namely at infectives respiratory and cardiac performed well during the quarter as compared to the same quarter last year. On the international business plant,
Revenues from international business are at INR 12,62 million compared to INR 1,949 million for the same quarter last year. Revenues from regulated markets are at 866 million as against INR 1,495 million. Revenues from U.S. business are at $247 million, against INR 814 million. Revenues from Europe for the quarter are at INR 599 million against INR 634 million. Revenues from South Africa Australia Newzeland are at INR 20 million against INR 47 million. And those from emerging markets for the quarter are at INR 396 million as against INR 454 million. Revenues the API business for the quarter are to be INR 301 million against INR 358 million and revenues from Adefo, CRO and Indoco Analytical Solutions for the quarter are at INR 36 million against INR 64 million. That's all about the business highlights for the second quarter. I now request the participants to put through their questions.
[Operator Instructions] We have the first question from the line of Mr. Rajat from Tata.
Yes. Yes. So I can see there is a CapEx of around INR 320 crores, which you have incurred in the first half. Can you just elaborate whether this CapEx are, [indiscernible].
Yes Rajad, Pramod here. so CapEx primarily is for 3 reasons. One is specifically for the upgradation of the plants, which Ma'am mentioned just now as a master manufacturing plant, we have been increasing patch sizes putting new machines replacing coal machines. That is at all oral solid doses plants.
That is one. Secondly, we are upgrading certain lines at our sterile plant at Goa2. That is the another CapEx.
And a certain portion of CapEx, the amount which you mentioned includes certain advances paid for two lines, which we already ordered an one injectable in[indiscernible] . So these are the 3 major CapEx which happened during last 6 months.
Incrementally [indiscernible] from here on how the CapEx guidance looks like.
So this year, as previously also we guided close to about INR 200-plus crores. I'll come back close about INR 180-odd crores is already incurred. So we don't see much incremental CapEx in the remaining 6 months or so.
Sure Sir, last question from my side. If I look at your Q-on-Q performance, I think there is a very sharp increase in other expenses, we are up to roughly around INR 27 crores. Your sale is up only by 6 crores. Can you just comment why your other expenses have moved increased [indiscernible] such a sharp.
So Rajat as compared to quarter 1, the is increased by about INR 20-odd crores, particularly in our various sales promotional activities, advertisement and promotional activities. And in travel, we have increased certain inforce and travel related to that input is also part of this other expenses.
There is also some increase in commissions and incentives since our acute divisions are doing very well.
I would like to understand -- I mean, I understand that U.S. is because of programmatic on product right now, given the remediate -- can you elaborate why we are seeing a decline in Europe as well as emerging markets?
Yes. So I think Europe and emerging markets are 2 different teams. But there is one commenting from both these solace is that both the plants supplying to emerging as well as Europe are also under the master manufacturing plan upgradation. So while we have tried our best to stagger it somehow in Q2, it was not possible anymore to keep things spending as they would have hurt is in future. Just to give you -- and our Europe and U.S. clients also geographically, we saved Goa makes for U.S. and Badi makes for Europe. Alogi make further emerging.
As part of our attempt to have a very agile operation clinical system. We are trying to align the portfolio at various positions. And therefore, whenever a location comes under renovation to meet with the Blue Print plan for -- as per the master manufacturing organization.
A Particular products to both geography suffers. So somehow in this quarter, that has happened. And pne of our larger manufacturing unit like to Europe, particularly is under the remediation not because regulators want it, but for us, because we've decided that, that is how going forward, we'll get far more output from the sales unit as much lesser cash business.
And as on U.S., I mean, how far are we in terms of picking up and ramping up for the other allocations I mean in Europe and U.S. I mean I understand it's always good to harmonize the quality and the others that you said?
Yes, yes. You are asking for color?
Yes. On a solid overall. I mean, I'm just trying to understand now that how [indiscernible] of the practices and the cost that has been implemented in.
Yes, What was the question exactly?
No. Earlier, I mean we are seeing impact in Europe and other regions that we are the semi regions, and we are basically trying to harmonize to understand. You put things in practice. So I understand ones we [indiscernible] work with the motor.
The others are working because it is more volume.
In regard to the [indiscernible] voluntary work being done for Europe and the earth starting Yes.
Because it depends, I think the perspective is very important to decide what is mandatory and what is necessary and what is voluntary. I think we are all aware of what is happening globally with increasing space and [indiscernible] going in cost of goods and particularly in U.S. with the dropping prices.
I think our corporate operations planning have packed together with the Business teams of Europe, U.S. as well as emerging markets. And we have made a plan, which will allow us to ride through these kind of rough phases and therefore, you may say it is voluntary, but we feel it as a mandatory. If we have to go forward, show better efficiency and better EBITDA margin both in Europe and U.S.
The next question from my side is on the gross margin if we are looking at, I mean, the API prices, my understanding is the chemicals and as prices have remained kind of demand. Would the drop in the gross margin because of the mix, the regional mix that you are seeing? Or are you seeing any kind of a [indiscernible] on the...
Which period you are looking for dropping [indiscernible]
So I'm primarily looking at the second quarter and probably in comparison with...
Okay. Gross margins and [indiscernible] Operating.
Because actually 2 plants, 2 large plants are under this kind of tagging shutdown planned or compulsory the operating cost that those pipes other than the material costs are of a fix nature, right?
So they remain. So finally, that's your that is how the margins get impacted. Is that your question?
Yes, yes, that explains below the gross margin. we have also seen the raw material price increment -- is that primarily because of the mix? Or is it primarily because the raw material prices have gone up. I just wanted to understand that.
So Mr. Sudarshan, if you see the raw metal sizes, the overall trend is on a different in side. Of course, not significantly But certainly, we are looking at certain key raw materials at the lower level.
Of course, the impact of the same will reflect going forward in customer quarters.
But yes, product mix does matter because as of now, when -- with Series been really down and whatever business for U.S. has come [indiscernible] so naturally, that impact would be seen in the GC, A.
B, we also, like we have explained in earlier calls, the company is in a transformational phase, in the past, much -- quite a substantial portion of our revenues for [indiscernible] market used to come from milestones as well as royalties or profit share, et cetera, et cetera. But less of profit share and more of milestone.
Now that Indoco has a front end in the U.S. of our own, and we are therefore keeping IP for ourselves, there is a miniscule amount that is coming from that. So rather than the leases are done down the entire sort of portfolio mix or product mix of the business has changed.
So in order to keep margins for us in the future, we are kind of following milestone currently. Does that answer your question?
And going forward, what should be the trajectory that we should expect in the near term as well as, say, 586 [indiscernible] asset.
It, I think you can appreciate the last 2 quarters, actually Q1 was all right. We saw some impact of the supply constream. Q2 has taken a maximum impact Q3 while we remain optimistic, I have to say there would be subsitical certain. So at this stage, I would want to wait for another quarter before I guide for the[indiscernible]
And one final question before I joined the queue. If I look at the data on the brands that we had given in the presen also data [indiscernible] and the growth that we are seeing, it looks like our brands are doing fairly well in the secondary market like the primary sales is retail letter. I mean one is what would be the resonance would do to capture plan going forward? I mean -- should the secondary are reflective of the primary data in terms of that got that you start moving to.
Yes, I think when you say second is a good, we are looking at QPharma and -- and you primary you're looking at the internally, is that it?
Yes. Yes,
So I think when you look at the internal data of IRl stand-alone, you have to factor in the aspect that 2 large toothpaste are now with the 100% subsidies warrant remedies. So the base sale of these two 2 toothpaste continues to be there in last listing, which is why if you look at growth on primary, it would appear that we [indiscernible] does that answer your question?
Yes. Yes, yes. That answers.
We's have next question from the line of Anket Manlotra from A Daisy's ventures.
So question Is there any intertain the last quarter?
Your voice is not very clear.
I'm getting a lot of echo maybe -- if you can.
Is it better now?
Yes, much better.
[indiscernible] Yes. So Diana put out that we are perfect. So underaction also stated in the past to what exactly happened on the.
Yes. So in 2023, [indiscernible] it is by U.S. FDA. And after that audit, the plant was classified as OAI while they were -- there were not any issues directly related to the tinting Premium lining issues have any such procedures sari unit, a had action because they said that the plant was old and certain areas need any remodeling.
So that more space is created -- also some of our mines were very old and NDA expected us to move from from [indiscernible] to the future isolator base line, et cetera. So in order classified -- after that, we have submitted an outlined plan to U.S. FDA of how and when we propose to meet these changes and complete the job.
And accordingly, routine updates have been going to U.S. FDA. As for this plan, much of the workforce to be completed by the end of 2024 and now to was surprised U.S. FDA once again came in July 2024. While the lines were actually opened up and are not ready for any kind of audit, et cetera. And from the object, there were seven observations, and we have responded to those observations.
And again, we have got the same. So basically, the way we look at it is once all the remediations on line is over. U.S. FDA is likely to come back for an audit before it can change the classification of the site. Does that explain your question?
Yes. It mostly does, so just can in that case that in you already once you are expecting to read this remediation to get done by the Q3. So. [indiscernible] Does that then now put to the entire process? And when do you expect the sum...
We still expect the remediation to get over by FDA coming down is going to -- or not coming down is going to hamper commercial from this side is something that we have to wait simply because we have continued the OAI status.
But our technical teams are in continuous dialogue with U.S FDA to try and understand their concerns and understand how we have to move forward -- because I don't know if there were some -- the FDA walked on they misunderstood in sales that we would be ready in November 23 and not November which was really odd because all our a communication said November 24 or later.
Okay. All right. My second question is any comment on i mean if I look at operating margin on a consolidated level, and the time [indiscernible] at that margin over around a much higher level and current quarter consolidated -- so I just wanted to understand from your opiates, where do you see this number.
Right, right. So like i said to one of the earlier questions. At this stage, we are not very -- we don't feel is a right time to make give guidance. But I can help you understand why the, consolidated picture is a -- so for consolidation, we have 2 subsidiaries for which sales are on quality to the companies, which matter more.
Ramirent which is taking us to face OTC and also manufactured a few items I for -- the second is subsidiary SPP which is for 5 months, which is our welter launching products in U.S. So Florida Pharma is actually quarter-on-quarter has made great progress since its acquisition only more than just announced a year, more than a year ago.
And we feel very confident in the next 6 months, especially after the supply to U.S. state smoothly -- we expect the draining through SPP on the corporate to come down. Coming to what is wherein the asset -- this is a phase where as part of the whole OTC product launch, awareness, digital marketing, individual marketing certain expenses, especially on the promotion side are a little bit higher, but that is something which cannot be delayed.
As a consequence of that, what is the mess also on the negative -- and the consolidated picture appears like this more because of ringing revenues are very sharp in comparison with that is cost organization. As explained earlier, because our international business has 1 been able to -- we have not been able to supply and collect revenues against international business. Okay?
Okay. We have the next question from the line of Abhishek from Padmaja Investment.
Yes. So my question, has been partially answered On the European part, you are done with this master manufac process? And can we expect the ramp-up from Q4? That's my question one.
Yes, we can.
Okay. So the European part is done the emerging marketpart is done . U.S. is current -- and we retain -- so currently, is like at a.
a9
Okay. Okay. And like stake another one year to say that again this classification change.
No, no, no. I don't think it should take 1 year. Had they not come in July. I feel in the -- by the Q1 of 25, the would have been the latest and they would have come down.
Now that they've just come in July, we will stay optimistic to bring them down. And also, we are in talks with them to understand, and I don't think current supply off of that site. So once the pipe comes up and get remediated total and fully ready, I don't see why we have to wait for FDA audits to start supply.
But we won't be getting new appraisers.
Yes, we have enough approvals. And actually, our order book, both for U.S. and Europe is very healthy. So that is not very disturbing. And neither are we missing out on any big deadlines for any para.
So that is how to be concerned right now. Right now, for me, the agency with which we can finish the projects. And you 4 lines. So one line is up actually just now as we speak.
And every 15 days, a line will come up. So the question is whether FDA will want for all 4 lines to be going before they agree to come down. Can we be asking for a call with them since we have recently commenced that size?
You'd have to understand if we have any other concerns. All that is going on. And I'm hoping in the next call, when I speak with you, I can give you a much better guidance.
Also been improvement, sequential competitors.
Yes. So U.S. business is not all about Saria for us. We do have solid, which is planned. And there is a small amount of business we have currently a solid that also work is going on to ramp it up. So there will be improvement surely. But as you likely said, Q4 would be probably a better time for us to see upside coming from smooth functioning of plant.
Then part is completely done in Q3 also will ramp up?
Europe is almost done.
Okay. But revenues haven't started optimize we expect.
Yes, we will expect it rather, yes.
We have next question from the line of Ankit Mitra from Senomyx.
my name is [indiscernible]. I have a couple of questions. The first one is related to the OTC, like what is the effect of the promotional expenses have been added to the other expenses. As OTC further, these are all from the OTC products, right? So going forward, like this OTC product in [indiscernible] ad and so will this expenses, this promotional expenses be there going forward?
So typically, if you are aware there are various categories of products that your bank even then you have BTC as is called behind the counter when you have OTX and then you have Sinco Bp. So depending on where the product is positioned, the amount of expenditure that is required is different. Not all the products we intend to take beyond vertical will always go Franco Tc. These 2 toothpaste has to go Franco Tc because the largest competitor we have is sensodine has almost close to 70% of its revenues coming from channel outside Epicel.
That is chemist, meaning they sell at grocers, they sell moran trade and the even with the canvella. So we have to go there And since this kind of a light in expansion shift in the structure of our goods are distributed. In order to keep your new SDs and new purchase partners and the GPs that is gross sort of positive on the product because they don't know this product, right?
The tenets know the products because it's been despaired for years. So for the channel partners also to get confidence the company has planned strategically, the kind of input that we would require specifically advertising on television and digital spend on Youtube, Facebook, et cetera, and we have been doing that. Coming to your question, future products as they come, as they go, OTC will be spent remain?
No, it doesn't mean that with every product, this kind of a spend is there. Also, sometimes for the first time when a company goes OTC, such as spend is required, and that's what we are doing.
Okay. So maybe a strong company maybe there.
If I will concentrate on growth in sales because we have one OTC. Because the whole thing about going OTC is getting a much larger market from which to get share. And while this expenditure initially is like an investment and we should be prepared for that. Yes?
Okay. Okay. My question is what kind of readily addition can you expect from the OTC project in FY '26?
Sir, the 2 -- right now, only 2 toothpastes are there with some various SKUs as in x sizes. But largely, there are just 2. And these 2 -- for the current year, we expect them to do in excess of INR 120 crores which would still be a recent growth over there, I think, if I'm not fisticwhen they were in ethical, it was around INR 85 crores, INR 90 crores.
Yes So this is the first year. But as the awareness of consumers, the reach to consumer we incidentally now subscribe to Nielsen data also -- when we measure what we called we think our annual melt distribution or.
Where we are consistently seeing a 15 month on month, 15% increase in the counter at which the product is being carried. These are all kind of foundation activities to prepare for a much larger sale as we go ahead. So I'm very confident on our field surely and certainly that is a year, we can definitely expect 25% to 30% growth from these 2 products with.
Then do you position your products mean this toothpaste, which of the normal toothpaste or do you place like consider it as only the peer of sensodine.
Not necessarily only sensorized, but sensitivity market. And as far in the sensitivity market, we are #2 to censor them.
We have next question from the line of Mr. Sudarshan from JM Financial.
I'd like to understand that a bit more on the debt side, if I look at the long-term debt, you have seen some kind of an increase and also in the short term that we have seen kind of an increase I mean historically, we never had an issue in terms of interest cost but driven by negative operating revenues.
And if we look at the interest today and the first half it is slightly higher than what one would have expected as compared to what we see in the past in the context of you can
Yes, I think the line was cut.
Sorry to interrupt on the line from that are disconnected
Shall we wait for him to join that?
We can proceed with the next question. So the next question is from the line of Pankit Manocha from A Daisy Ventures.
Hello. Please go ahead, sir. Is there a problem in the line by any cans since the second caller to.
Mr. Dhanil, you are on top.
Sir, I have one question. U.S. and make the business model from kind of licensing out our brand to remand looking our own campaign. So can you talk a bit about how long this transition is going to take and whether all the existing brands and the register product will also get transferred here. And sir, what is the time line, if you can talk a bit about that.
Yes. Thank you for the question. So no, in answer to your question, not all products which were licensed out are being brought in. But further products are not getting licensed out. So the milestones, therefore, are not coming in.
We have some excellent relationships with contained other content partners in U.S., with whom we are quite happy, especially in the solar space, and those continue Much of the Astec and sterile opportunities to, we would prefer to do through SCP going forward. Many of the products which we had licensed out to Teva, for example, are now back with us as part of the arrangement.
And those are also being relaunched through SPP. Does that answer your question?
So adjusting to what percentage of your portfolio now is back 9.2.
See, volume and are 2 different things because you will get volume some and value in oil mix. So roughly, I would say, around 60-40, with 60% going and 40% scale through others.
That 10% is now currently everything is now to it?
No, no, no, 60% or equal
[indiscernible]. 40% is currently with other partners.
So 60% is already doing done by our own content correct
Plan to be done. Once the fact...
We have next question from Uncle Agrawal from Rc Business House Private Limited.
you have a for Harita annualization process men, top line, please?
Thank you for the question. Any season the kind of things that I said earlier, literally, we are looking at incrementally getting 50% more from each of our sites, each of the factories. [Foreign Language]
Testing costs associated to it we take process times required to manufacture each batch is being reduced. And I would not like to unitary commit, but I'm actually hoping that as the numbers come out, you will see the beauty of what this kind of restructuring the. [Foreign Language]
And we are waiting for these beautiful things to come out and show by way of profitability.
[Foreign Language]
Yes. We are expecting from an EBITDA perspective, at least great increment to happen. But because of what we are going to right now, [Foreign Language], I would prefer to wait for one more quarter before we.
[Foreign Language]
[Foreign Language] To do parts of the work, analytical research from are analytical services [Foreign Language]
We have next question from Tradecom JM Financial.
Mam, I would like to understand on the debt side, if I report from March to September, both on the long term as well as the short term that is related to our addition more or less INR 140 crores to INR 150 crores addition I understand that there is some CapEx that we are undergoing a autothrottle.
I mean, if I look at it on the context of the operation, you never had an issue on debt but I do understand that our margins are contracting because of various reasons, it tends to impact the profit -- can you give some color on how do you see the debt evening out, say, in the next couple of years or so?
And second is on the back, even in the first half, the loss of in question should you take lower tax rate taking the benefit of the last of the new remote.
So let me answer first on the business, and then I will let Pam take on some of your on the model. So you said -- I think there is something you said, which I feel leads correction. You said margins are contracting, which is actually not true. Margins are not contracting.
The efficiency we are beginning is to increase the margin. And also to prepare for the kind of business we are expecting both from Europe and U.S. going forward. the enhancement in capacity being them.
So it is correct from your side to wonder why so much CapEx is being companies incurring CapEx, whereas on one side, historically, also you must have seen that utilization was mixed. There is a very funny aspect of capacity how you can say capacity is also very important.
What has happened in the generic space, especially in U.S. And of course, you came for 1 year is that in order to ride over the kind of price drops except up, each manufacturing unit has been trying to do a multimile or various kind of product mix. This kind of a mix when it comes to operations poses all kinds of challenges, whether it comes to line change, especially in sterile with media files, et cetera, et cetera. And eventually, the unit becomes less agile.
So on Safari would look like 60% of that being utilized. But finally, when you ask them to make one more that they have lost so much of downtime that they are not able to put -- what we are doing right now is part of the master manufacturing connection plan is to bring down all such teams.
So it might appear to you right now that the company is investing when it may not have required the investment -- but trust me that the wins that have been done now as we bear for a time when the huge volume best. I'll let Promote now explain to you about the barrel.
Mr. [indiscernible] do you see as compared to March, our long-term borrowing enforcement has gone up by about INR 54 crores, primarily towards the CapEx, what we discussed in detail in our call the Masterman Michelin initiatives and the site to certain upgradation and the new rights. So that is the primary reason for increasing long-term borrowings. State also has increased by close to INR 60 crores.
So that is our investment into various new initiatives what we have carried on -- then there is a slight increase in borrowing in a in one of our subsidiaries. Again, that is towards the CapEx related to warrant new business.
Finished goods lines are, we are just an order, and we expect that to be finished within the next 6 months time. So primarily increase in borrowings towards creating new capacities investment for the future.
In one more area that is particularly on the stability lab. So we have now centralized stability newly created at [indiscernible] so plan is to basically move most of the stability as spread across various plants to this one central place to bring in efficiency to reduce cost. So all this is for investment for the future Mr.
Yes. So and what would be that you're comfortable? Do we have any number demand over the long term.
Not really. So as we discussed, we don't expect much of the CapEx going forward. will be like an earning maintenance CapEx also, but that most probably will be able to absorb our internal accruals. But maybe incrementally we make close to about INR 40 crores to INR 50 crores we require intermittently, but not beyond this amount.
And I missed one question that is on taxation. So we are already on the lower tax rate, Mr Sudharshan.
At this point of time.
The next question is from the line of Abhishek from Padmaja Investments.
My question is currently, we have close to 2 pending ANDA approval side when it comes to U.S.
Yes. the positive.
How many are in total products.
If I'm not mistaken, close to 6 or either direct.
And are they in Parcours.
I think you will appreciate that we have stopped giving this kind of disclosure now.
Okay.
Thank you. The next question is from Ali Varia from B&K Securities.
I just wondered lacking clarity to your facility applying to emerging markets and EU were under the renovation under the mask manufacturing plan. So I might have missed the point, but when is it expected to be completed? Or has it been completed by September end?
So we have 2 sites supplying to Europe right now and one for emerging the emerging side is almost done. One of the European side is done. The second one is almost complete.
Okay. And during the were the pipe completely shut for coming.
All one of the Europe pipe were almost not available. And the other two were partially available.
Okay. Okay. For the entire quarter.
Yes.
We will be taking that as our last question. As there are no -- I would now like to hand the conference over to management for closing comments.
Thank you all for the very interesting questions, which has allowed us to express our position. Thank you very much, and have a good day. Thank you.
Thank you.
On behalf of Dolat Capital, that concludes this conference. Thank you for joining us. You may now disconnect your lines.